A Global Comparison of Corporate Value Adjustments to News of Cyber Attacks


11 Pages Posted: 12 May 2020 Last revised: 8 Jun 2020

Date Written: April 17, 2020


The growing threat of cyber breach as become one of the most feared risks corporations around the world are currently dealing with. The dynamic nature of cyber risk, along with evolving global regulations, necessitates that corporate management strategically address cyber risk to minimize effects on corporate value. This paper uses event study methodology to analyze global shareholder value effects of cyber breaches occurring between the periods 1990 to 2019. Cumulative Average Returns (CARs) are calculated by country, and in aggregate, from first notice date to periods of up to 90 days post announcement to compare short term and long term effects of cyber breaches on stock price. Similar to other smaller studies, results for this much larger data set show significant negative returns for US corporations in all sample windows. However, the changes in shareholder value are much smaller than were previously seen in other studies. Unlike its US counterparts, short term results for the five major non-US countries in this sample show no significant changes to price as a result of cyber breach announcements, even though the non-US firms also trade on US exchanges. Long term results for the aggregate non-US sample show significance only at the 0 to 30 day window. Long term results for some of the individual countries do support some various positive and negative event windows, but no common patterns are seen among countries. These results point to differences in how news of a cyber breach, by country, is perceived in the market. These results are interesting in that they also follow some of the patterns that insurance companies have seen in the reticent buying habits of global companies with respect to cyber insurance worldwide.

Keywords: cyber, breach, shareholder value, global, and returns

JEL Classification: F2, G1, G14, and G32

Suggested Citation

Hogan, Karen M., A Global Comparison of Corporate Value Adjustments to News of Cyber Attacks (April 17, 2020). https://www.virtusinterpress.org/IMG/pdf/jgrv9i2art2.pdf, Available at SSRN: https://ssrn.com/abstract=3578625

Karen M. Hogan (Contact Author)

St. Joseph's University ( email )

5600 City Avenue
Philadelphia, PA 1913-1395
United States
610-660-1671 (Phone)
610-660-1986 (Fax)

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